Climate change will push Canadian business onside

Until he lost his shirt in the Dirty Thirties,arelativeof minewas an influential businessman in southern Saskatchewan. Among his interests was a livery stable, with a blacksmith, harnesses, buggy whipsand everything you needed to keep horses on the road and in the field.

Horses are still with us, of course, but today it is hard to realize what an enormous industry they supported only a hundred years ago.

As skeptics scoff about Prime Minister Stephen Harper's grudging concession on the G7 agreement to end the use of fossil fuels, I think it is useful to remember how quickly businesses can completely transform an economyonce they get the bit between their teeth.

• Harper agrees to G7 'decarbonization'by 2100
• The G7 and its 85-year carbon pledge

"If we can get companies putting their innovative genius to work on solving environmental problems, we're going to find solutions that we can't even imagine today," says Stewart Elgie, a professor of law and economics at the University of Ottawa.

He isconfident that when it comes to fighting climate change,business will pull its share of the load. But we have to get over a hump.

Horse sense

A hundred years ago, the saddlery and harness business had its own industrial journals, well worth perusing. United States Leather, making a product essential to harnesses, was one of the 12 founding companies in the Dow Jones Index.

An inspection of one of world's biggest monthly harnesstrade magazines, produced in Walsall,England aworldhubofharness and saddlemaking shows that to a large extent, the industry did not see the end coming.

"Whilst some commentators (quitecorrectly) predicted disaster for the saddlery and harness trade," says a commentary published byWalsallCouncil,"others were morecomplacent, dismissing the motor car as an unreliable and expensive plaything whichwould never catch on."

Obviously existing businesses, whether harness makers then or carbon producing industriesnow,represented by conservative politicians, neverwant to see radicalchange happen. They represent a major force for maintaining the status quo.

• Why businesses are not seeking solutions to climate change
• Market forces are winning the climate change battle

But according to Elgie,Canadianbusinesses are on their way to altering the economy for good.

Seeking profit

Whether installing solar panels or managing the finances behindcap and trade markets, the morecompanies that realize they can profit from overcoming climate change, the more they will change from foot-dragging to leadership.

Tax incentives and regulations may be necessary to get the process started, says Elgie, but after that happens the economy couldbe only five years away from a tipping point where a majority of companies have changed their thinking.

"Instead of beingin the compliance part of a company's brain,all of a sudden itbecomes part of the profit part of a company's brain," says Elgie.

That unleashes the strong forces of the market."It is universally acknowleged that [markets] have unlocked a level of human ingenuity, innovation and effort really never before witnessed in human history."

According to his research on thePorter Hypothesis, rather than weakening an economy, the effort and innovation to overcome environmental problems can actually send the economy on to greater strengths. He quotes the example of British Columbia, where the economy has grown strongly despite a 16 per centreduction in the use of carbon fuels.

More complex industries

Whether it is charcoal burners displaced by coal, weavers displaced by factory looms, or livery stables replaced by cars,when one industry dies, another, often more complex, industry takes its place.

United States Leather lost its place on the Dow in 1905. After a steady decline in the industry after the FirstWorld War, theSaddlery and Harness Journalmanaged tolinger for a while,only ending publicationin 1933. In three decadeshorses wentfrom industrial and essential to recreational and processional.

Like the livery and saddle business, the carbon fuels industry will not go easily, especially at first.

Conservative thinkers like Harper maywant them to stayalivepast the date they are no longer wanted. But that is swimming against the tide, saysElegie. Hesaysrepeated economic analysis shows that increasingefficiency inresources has always led to economic success.

The land in Saskatchewan where my relative raised horses for his livery stable is now dotted with oil wells to fuel the vehicles that helped put him out of business.

But once competing businesses become engaged in the next transformation to a carbonless economy, you maybe surprised how quickly the world changes once again.

And maybe in three decadesoil wells will go the way of the buggy whip.

Follow Don on Twitter @don_pittis

More analysisby Don Pittis